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The Fed’s “violent” interest rate hikes continue, and recession fears beat market sentiment?

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The slow rate of price decline in the United States in August forced the Federal Reserve to continue to take heavy medicine to fight inflation. At 2:00 a.m. Beijing/Hong Kong time on Thursday, the interest rate meeting ended and an interest rate hike was announced by 0.75%. The target range of the federal funds rate was raised to between 3 and 3.25%. ,In line with expectations.

However, the Fed’s interest rate dot plot shows that the federal funds rate is expected to be 4.4% by the end of this year, compared with 3.4% in June, which also means that the remaining two meetings this year will raise interest rates by a total of 1.25%.

The Fed noted strong growth in the U.S. job market and low unemployment, but inflation remained elevated, reflecting imbalances with the pandemic, high food and energy prices, and broader price pressures. Recent indicators point to moderate growth in consumer spending and business production.

It should be noted that the news has investors worried that the economy will deteriorate due to interest rate hikes.

In the foreign exchange market, after the Federal Reserve announced to raise interest rates by 0.75%, the US dollar index hit a 20-year high of 111.64 on Wednesday, and finally closed up 1.06% at 111.37.

EUR/USD closed down 1.32% at 0.9836. HSBC economists expect the euro to fall below this year’s lows against the dollar in the coming weeks. Meanwhile, sterling fell to a fresh 37-year low of $1.1234 and was last down 0.98% at $1.1268.

In addition, the dollar rose slightly against the yen, rising to a maximum of 144.70, and finally closed up 0.25% at 144.07. Traders remained cautious about pushing the dollar higher given the threat of Japan intervening to boost the yen. The Bank of Japan will announce its interest rate decision on September 22. IG Group predicts that it is expected to remain unchanged, focusing on whether there are foreign exchange intervention measures.

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Daily Market Analysis

黄金交易提醒:美联储决议来袭,警惕多空双杀!

周三(2月1日)亚市盘初,现货黄金窄幅震荡,目前交投于1927美元/盎司附近。隔夜金价探底回升,虽然上周出炉的美国四季度GDP数据增强了鹰派预期,再加上月末仓位调整因素,美元指数周二一度反弹至近两周高位附近,金价则一度跌至1900整数关口附近,但美国第四季劳动力成本增幅低于预期,令鸽派预期有所回升,吸引逢低涌入金市,帮助金价扭跌为涨,收盘交投于1928美元/盎司附近。 本交易日市场目光将聚集美联储利率决议,市场普遍预期美联储将加息25个基点,但对于美联储的鹰鸽态度还存在一定的分歧。一方面,美联储可能强化将利率较长时间维持在5%以上,以更好的控制通胀水平,但另一方面,市场怀疑美联储可能会向外界传递将在5月份中止加息的信号。

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